can universal life insurance be converted to a paid up whole life policy?
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Asked October 17, 2017
Universal life insurance is very easy to understand simply because of its name. It is universal and can do almost anything! There are two standard types of life insurance, whole life and term. Universal life is a kind of whole life insurance that is known for being renewable and convertible. This means that, as a policy owner, you can change it to almost whatever kind of insurance you desire!
Converting a universal life insurance policy to a paid-up addition of whole life is simple, too. The difference is that when you are insured by an insurer with universal life, you are going to be paying premiums every month, quarter, or year until you pass away or until you reach 100 years of age. With a paid-up edition of whole life, you are just adding what is known as a "rider" to the policy to pay for the rest of the policy years. This way, you do not need to keep paying it for the rest of your life. Instead, you and your insurance producer, or the company that gave you the life insurance, will come up with a plan for you to pay your entire policy off by a certain age. These policies are usually read as "LP-65" or "LP-50," meaning that you will be covered for the rest of your life, but you will stop paying premiums at 65 or 50.
It is very easy to convert, but the premium you pay each month will likely increase to pay for the policy sooner. This is something to look out for when you sit down with your life insurance company, and it is important to know how your policy is changing and what your new premium will be.
Answered October 18, 2017 by insdad